Latest news with #ProductionHike
The National
04-08-2025
- Business
- The National
Oil prices decline on Opec+'s September output hike decision
Oil prices dropped on Monday after oil producers' alliance Opec agreed to another large output hike in September. Brent, the benchmark for two thirds of the world's oil, fell 2.2 per cent to $68.12 a barrel by 5.09pm UAE time on Monday, and West Texas Intermediate, the gauge that tracks US crude, declined 2.5 per cent to $65.6 a barrel. The Organisation of the Petroleum Exporting Countries and their allies, known as Opec, agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share. The move marks a full and early reversal of Opec's largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4 per cent of world demand. 'The meeting lasted just 14 minutes, suggesting there was no pushback and broad support for the decision,' said Giovanni Staunovo, a strategist at the Swiss bank UBS. 'With Sunday's decision, the group fully unwound one layer of the 2.2 million barrels per day [mbpd] of voluntary crude production cuts. The production quota increase between March and September is closer to 2.5mbpd, as it includes a capacity-related quota adjustment for the UAE of 0.3mbpd.' So far, the oil market has been able to absorb the additional barrels coming from Opec very well, with Brent crude moving mostly sideways in a $60 to $70 per barrel range in recent months, Mr Staunovo explained. With some countries in the group producing above the quota, as well as those that previously overproduced facing compensation cuts and some members probably maxed out in terms of capacity, the actual production increases are likely to be lower this and next month as well, he added. 'All eyes now shift to US President Donald Trump's decision on Russia later this week and whether he targets buyers of Russian oil with secondary sanctions or tariffs,' Mr Staunovo said. Recent geopolitical tensions have added to oil market volatility this year. A 12-day conflict between Israel and Iran earlier this year drove oil prices up by more than 13 per cent before they retreated below prewar levels. Vijay Valecha, chief investment officer of Dubai-based Century Financial, said the escalating geopolitical tensions surrounding Russian oil could significantly tighten global supply. US President Donald Trump's aggressive stance, threatening 100 per cent secondary sanctions on Russian crude buyers, risks removing up to 2.75 million bpd from the seaborne market, potentially forcing major importers like India and China to seek alternative, more expensive sources, he added. 'This prospect of substantial supply disruption, combined with renewed expectations of Federal Reserve rate cuts following weaker US jobs data, could stimulate demand as a weaker dollar makes oil more affordable,' according to Mr Valecha. 'Should these sanctions materialise and global growth avoid a significant downturn, the tightening supply-demand balance would create a powerful tailwind for oil prices.'
Zawya
04-08-2025
- Business
- Zawya
Oil slips as OPEC+ proceeds with September output hike
SINGAPORE: Oil prices extended declines on Monday after OPEC+ agreed to another large production hike in September, with concerns about a slowing economy in the U.S., the world's biggest oil user, adding to the pressure. Brent crude futures fell 40 cents, or 0.57%, to $69.27 a barrel by 0115 GMT while U.S. West Texas Intermediate crude was at $66.96 a barrel, down 37 cents, or 0.55%, after both contracts closed about $2 a barrel lower on Friday. The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, citing a healthy economy and low stockpiles as reasons behind its decision. The move, in line with market expectations, marks a full and early reversal of OPEC+'s largest tranche of output cuts, plus a separate increase in output for the United Arab Emirates, amounting to about 2.5 million bpd, or about 2.4% of world demand. Analysts at Goldman Sachs expect that the actual increase in supply from the eight OPEC+ countries that have raised output since March will be 1.7 million bpd, or about 2/3 of what has been announced, because other members of the group have cut output after previously overproducing. "While OPEC+ policy remains flexible and the geopolitical outlook uncertain, we assume that OPEC+ keeps required production unchanged after September," they said in a note, adding that solid growth in non-OPEC output would likely leave little room for extra OPEC+ barrels. RBC Capital Markets analyst Helima Croft said: "The bet that the market could absorb the additional barrels seems to have paid off for the holders of spare capacity this summer, with prices not that far off from pre-tariff Liberation Day levels." Still, investors remain wary of further U.S. sanctions on Iran and Russia that could disrupt supplies. U.S. President Trump has threatened to impose 100% secondary tariffs on Russian crude buyers as he seeks to pressure Russia into halting its war in Ukraine. At least two vessels loaded with Russian oil bound for refiners in India have diverted to other destinations following new U.S. sanctions, trade sources said on Friday, and LSEG trade flows showed. However, two Indian government sources told Reuters on Saturday the country will keep purchasing oil from Russia despite Trump's threats. Concerns about U.S. tariffs impacting global economic growth and fuel consumption are also hanging over the market, especially after U.S. economic data on jobs growth on Friday was below expectations. U.S. Trade Representative Jamieson Greer said on Sunday that the tariffs imposed last week on scores of countries are likely to stay in place rather than be cut as part of continuing negotiations. (Reporting by Florence Tan Editing by Rod Nickel and Christian Schmollinger)
Reuters
04-08-2025
- Business
- Reuters
Oil slips as OPEC+ proceeds with September output hike
SINGAPORE, Aug 4 (Reuters) - Oil prices extended declines on Monday after OPEC+ agreed to another large production hike in September, with concerns about a slowing economy in the U.S., the world's biggest oil user, adding to the pressure. Brent crude futures fell 40 cents, or 0.57%, to $69.27 a barrel by 0115 GMT while U.S. West Texas Intermediate crude was at $66.96 a barrel, down 37 cents, or 0.55%, after both contracts closed about $2 a barrel lower on Friday. The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, citing a healthy economy and low stockpiles as reasons behind its decision. The move, in line with market expectations, marks a full and early reversal of OPEC+'s largest tranche of output cuts, plus a separate increase in output for the United Arab Emirates, amounting to about 2.5 million bpd, or about 2.4% of world demand. Analysts at Goldman Sachs expect that the actual increase in supply from the eight OPEC+ countries that have raised output since March will be 1.7 million bpd, or about 2/3 of what has been announced, because other members of the group have cut output after previously overproducing. "While OPEC+ policy remains flexible and the geopolitical outlook uncertain, we assume that OPEC+ keeps required production unchanged after September," they said in a note, adding that solid growth in non-OPEC output would likely leave little room for extra OPEC+ barrels. RBC Capital Markets analyst Helima Croft said: "The bet that the market could absorb the additional barrels seems to have paid off for the holders of spare capacity this summer, with prices not that far off from pre-tariff Liberation Day levels." Still, investors remain wary of further U.S. sanctions on Iran and Russia that could disrupt supplies. U.S. President Trump has threatened to impose 100% secondary tariffs on Russian crude buyers as he seeks to pressure Russia into halting its war in Ukraine. At least two vessels loaded with Russian oil bound for refiners in India have diverted to other destinations following new U.S. sanctions, trade sources said on Friday, and LSEG trade flows showed. However, two Indian government sources told Reuters on Saturday the country will keep purchasing oil from Russia despite Trump's threats. Concerns about U.S. tariffs impacting global economic growth and fuel consumption are also hanging over the market, especially after U.S. economic data on jobs growth on Friday was below expectations. U.S. Trade Representative Jamieson Greer said on Sunday that the tariffs imposed last week on scores of countries are likely to stay in place rather than be cut as part of continuing negotiations.
Reuters
03-08-2025
- Business
- Reuters
Oil slips after OPEC+ agrees to hike output in September
SINGAPORE, Aug 4 (Reuters) - Oil prices slipped in early Asian trade on Monday after OPEC+ agreed to another large production hike in September. Brent crude futures fell 43 cents, or 0.62%, to $69.24 a barrel by 2218 GMT while U.S. West Texas Intermediate crude was at $66.94 a barrel, down 39 cents, or 0.58%, after both contracts closed about $2 a barrel lower on Friday. OPEC+ agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, as concerns mount over potential supply disruptions linked to Russia. The move marks a full and early reversal of OPEC+'s largest tranche of output cuts, plus a separate increase in output for the United Arab Emirates amounting to about 2.5 million bpd, or about 2.4% of world demand. In a statement following the meeting, OPEC+ cited a healthy economy and low stocks as reasons behind its decision. "The actual increases since April have been smaller than the headline number and are primarily composed of barrels from Saudi Arabia and the UAE (United Arab Emirates)," RBC Capital Markets analyst Helima Croft said in a note. "The bet that the market could absorb the additional barrels seems to have paid off for the holders of spare capacity this summer, with prices not that far off from pre-tariff Liberation Day levels."
